The Demand Curve Facing a Perfectly Competitive Firm Is

question 169

Multiple Choice

The demand curve facing a perfectly competitive firm is

• A)almost vertical at the market quantity
• B)perfectly inelastic
• C)perfectly elastic
• D)horizontal at the price the firm wishes to charge
• E)downward sloping

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Definitions:

Natural Monopolies

Market situations where a single supplier is more efficient in serving the entire market due to high fixed costs and significant economies of scale, commonly seen in utilities.

U.S. Postal Service

A federal agency responsible for providing postal services in the United States, known for delivering mail and packages domestically and internationally.

Natural Monopoly

A market situation where a single supplier is most efficient in producing or supplying goods or services due to high fixed or startup costs.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, characterized by a reduction in the per-unit cost as production increases.